Are shophouses getting their grooves back?

For the seasoned property investor and connoisseurs, shophouses have been significant value propositions. The year 2011 has so far been an encouraging one for shophouse property market, where sales activity in the form of number of shophouses purchased, sustained and reflected only moderate slowdown from 2010, in sync with a more cautious economic condition.

Apart from the traditional investors’ motivation for shophouses, i.e. keen in the uniqueness of such properties particularly those with vintage and special architectural features, there is also some diversion from the residential sector as stricter residential property cooling measures were implemented in January, particularly rising the sellers’ stamp duty. There were some, primarily investors instead of owner occupiers, who chose to invest in shophouses.

Amid the economic slowdown, all property sectors will be affected, and shophouses, being generally unique, vintage property, will not be spared. However, the moderation in interest for shophouses will be mitigated by its exclusive design and limited supply, particularly from property investors who have deep pockets and are interested to make use of the soft landing to up their collection of special properties.

There are various value propositions of shophouses which will continually stand out, especially for shophouses which will be used for office. Such shophouses are welcomed by the creative or niche business services providers, which see shophouses as offering better inspiration than traditional office blocks and meanwhile, enjoy the flexibility of after office hours air-conditioning. Many single owner office buildings provide only air-conditioning during the standard working hours and this limits business productivity particularly for some occupants who need to work beyond the office hours to maximize business commitments and dealings.